New faces at DHI: same old, same old, or a new beginning?

Full disclosure: I worked at Dice (now DHI) from 1997 through 2000. I don’t hold DHI stock, and have only fleeting contact with DHI personnel. Also, I’m not too excited about the DHI logo.

So DHI, parent company of Dice, ClearanceJobs, and eFinancialCareers, has a new-ish (6 mos.) president, Art Zeile. They also have a new sales director, Chief Product Officer, and Chief Marketing Officer. In other words, they’ve flipped the page. Turned over a new leaf. Etcetera and so on.

Why did they do that? Well, in a nutshell, money – or the lack thereof. DHI’s stock is in the gutter, they’ve ‘refocused’ on tech by shedding multiple properties (including – most recently – Rigzone), and revenue from their flagship service, Dice, is down 6% year over year for the 3rd quarter. That’s better than previously, but still, the board obviously wanted big change, and now they are getting it. Maybe.

First of all, why should you care? After all, DHI is a legacy recruiting brand (the original BBS went up in 1990!). Although it’s publicly held, it has never possessed the glamour of some of its better known job board brethren, and between going public, going bankrupt, and going public again, it’s taken its shareholders on some very exciting (or disturbing) rides over the past 20-odd years.

But…DHI – primarily via Dice – has also fought through many of the same industry changes and challenges as the rest of us. It was acquired by Earthweb early on in the internet boom. It faced the scrutiny of shareholders. It fought against the rise of aggregators. It tried to build a network of content sites (remember Slashdot?). It fought through numerous battles with a dated technical platform. It tried diversification via multiple niche sites. In other words, if there was a way for a niche site to grow, DHI probably tried it.

So why hasn’t it worked? Well, you could argue that – simply by surviving – it has. Dice, ClearanceJobs, and eFinancialCareers are still here, long after many of their competitors have faded. DHI is going to churn out somewhere in the neighborhood of $150M+ this year. So someone is buying its services, right? Yet DHI has always felt to me like the Rodney Dangerfield of the recruitment marketing industry – it just ‘can’t get no respect’. In part this is because it is one of the few publicly traded job board companies, so it gets much more scrutiny than some of its relative peers, like Snag or StackOverflow. It’s also because legacy brands aren’t respected in our industry, at least on the investment side. And – let’s be blunt – DHI has had some serious execution issues over the past decade.

But it’s interesting. Many of the bright shiny new recruiting companies out there are running on VC dollars. They haven’t made a cent of profit. DHI has produced profits for decades. Such is life. Is DHI doomed to a future of diminishing revenue – and relevance?

The new CEO doesn’t think so (surprise!). You can read his comments here. The company is rolling out a new search platform they call Talent Search with Intellisearch. Basically, you enter your job description and it kicks out the candidates that fit. This is going to all three sites, by the way. And don’t forget that ClearanceJobs is growing at a healthy 20% pace. But…DHI pulled out of Europe – an area of growth for many in the industry. But…the Dice renewal rate is 76%. But, but, but.

So it’s hard to say. I would like to see DHI succeed, to show how a legacy brand can maintain relevance for employers over the decades. It’s certainly been done in other industries. Yet, as one of the analysts said during the Q3 earnings call, “You’re trading at substantial discounts than what any logical person thinks you were and yet management refuses, I should say the board really is who it sits with, refuses to do anything to help shareholders or at least help the market get a sense for what these shares are worth. And it’s a travesty and I hope TCS gets through to you guys.” That’s not happy talk.

Your thoughts?

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